Fort Myer Child Development Center contract awarded to Grunley Construction for $17.6M, exceeding initial estimates by $1.16M

Contract Overview

Contract Amount: $17,600,064 ($17.6M)

Contractor: Grunley Construction CO., Inc.

Awarding Agency: Department of Defense

Start Date: 2006-09-12

End Date: 2010-11-07

Contract Duration: 1,517 days

Daily Burn Rate: $11.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: DESIGN-BUILD CHILD DEVELOPMENT CENTER, FORT MYER, VA. BASE BID LINE ITEMS 0001-0004 AND OPTIONAL LINE ITEMS 0005, 0007, 0008.

Place of Performance

Location: FORT MYER, ARLINGTON County, VIRGINIA, 22211

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $17.6 million to GRUNLEY CONSTRUCTION CO., INC. for work described as: DESIGN-BUILD CHILD DEVELOPMENT CENTER, FORT MYER, VA. BASE BID LINE ITEMS 0001-0004 AND OPTIONAL LINE ITEMS 0005, 0007, 0008. Key points: 1. The contract utilized a firm-fixed-price structure, aiming to control costs for the Department of the Army. 2. Full and open competition was employed, suggesting a potentially competitive bidding environment. 3. The project duration of 1517 days indicates a significant, long-term construction undertaking. 4. The base bid was $16.44M, with options adding $1.16M, representing a 7% increase over the base. 5. The contract falls under the Commercial and Institutional Building Construction NAICS code. 6. The award was made by the Department of the Army, a major component of the Department of Defense.

Value Assessment

Rating: fair

The total award amount of $17.6M for the design-build child development center appears to be within a reasonable range for a project of this scale and complexity. However, the contract exceeded its base bid by $1.16M (approximately 7%) due to the exercise of optional line items. While options are common, a significant increase warrants scrutiny to ensure they represent genuine value and were not underestimated in the initial bidding process. Benchmarking against similar government-funded child development center construction projects would provide a clearer picture of value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. With three bids received, the competition level suggests a moderate degree of market interest. While three bidders can lead to price discovery, a higher number of bidders often correlates with more aggressive pricing and potentially better value for the government. The specific bid amounts from the other two competitors are not provided, which limits a deeper analysis of the price competitiveness.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, driving down prices and increasing the likelihood of securing the best value. The presence of three bidders suggests a reasonable level of competition, which should have contributed to a more competitive price for this construction project.

Public Impact

The primary beneficiaries are military families at Fort Myer, Virginia, who will gain access to a new child development center. The project delivers essential infrastructure for childcare services supporting military personnel. The geographic impact is localized to Fort Myer, Virginia. The construction project likely involved a significant number of skilled laborers and tradespeople, contributing to local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if optional line items were not fully justified or priced competitively.
The 1517-day duration suggests a lengthy construction period, increasing exposure to market fluctuations and potential delays.
Limited transparency on the specific reasons for exercising optional line items and their cost-effectiveness.

Positive Signals

Awarded under full and open competition, promoting a fair bidding process.
Firm-fixed-price contract type helps to establish a ceiling on costs.
The project addresses a critical need for childcare facilities within a military installation.

Sector Analysis

This contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the broader construction industry. Government construction projects, particularly for military installations, often represent substantial investments. Benchmarking this project's cost against similar-sized federal or commercial child development centers would be necessary for a comprehensive value assessment. The total value of $17.6M places it as a mid-to-large scale construction project within this category.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Grunley Construction Co., Inc. is a large business. There is no information provided regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract award is likely minimal, unless Grunley has robust subcontracting initiatives not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and project management offices. As a federal construction project, it is subject to standard government oversight procedures, including site inspections, progress reporting, and financial audits. The specific Inspector General jurisdiction would be that of the Department of Defense. Transparency is generally maintained through contract award databases and public reporting, though detailed project-specific oversight activities are not publicly disclosed.

Related Government Programs

Military Construction Projects
Department of Defense Facilities
Childcare Infrastructure
Federal Building Construction

Risk Flags

Potential cost increase due to optional line items.
Extended project duration increases risk exposure.
Need for detailed review of optional item justification and pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.6 million to GRUNLEY CONSTRUCTION CO., INC.. DESIGN-BUILD CHILD DEVELOPMENT CENTER, FORT MYER, VA. BASE BID LINE ITEMS 0001-0004 AND OPTIONAL LINE ITEMS 0005, 0007, 0008.

Who is the contractor on this award?

The obligated recipient is GRUNLEY CONSTRUCTION CO., INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $17.6 million.

What is the period of performance?

Start: 2006-09-12. End: 2010-11-07.

What is the track record of Grunley Construction Co., Inc. with federal contracts, particularly with the Department of the Army?

Grunley Construction Co., Inc. has a history of securing and performing federal contracts, including significant work with the Department of the Army and other federal agencies. Their portfolio often includes large-scale construction and renovation projects, such as educational facilities, healthcare centers, and administrative buildings. Analyzing their past performance on similar projects, including adherence to schedule, budget, and quality standards, is crucial for assessing their reliability on the Fort Myer Child Development Center project. A review of their contract history might reveal any patterns of cost overruns, delays, or disputes, which could serve as indicators of potential risks for this specific contract.

How does the final contract value of $17.6M compare to the initial base bid and the bids of other competitors?

The final contract value of $17.6M includes the base bid of $16.44M plus $1.16M for optional line items. This represents a 7% increase over the base bid. While the specific bid amounts from the other two competitors are not publicly available in this dataset, the fact that three bids were received under full and open competition suggests a degree of price discovery. To fully assess value, a comparison with the bids submitted by the other two companies would be necessary. If the optional items were significantly higher than anticipated or if the awarded price is substantially above the other bids, it could indicate a less than optimal value outcome for the government.

What are the primary risk indicators associated with this design-build construction contract?

Key risk indicators for this design-build contract include the potential for scope creep or cost escalation related to the exercise of optional line items, which added 7% to the base bid. The extended project duration of 1517 days (over 4 years) increases exposure to market volatility in material costs, labor availability, and potential unforeseen site conditions. As a design-build project, risks associated with coordination between design and construction phases must be managed effectively. Furthermore, the performance history of the contractor, Grunley Construction Co., Inc., on similar large-scale federal projects should be reviewed for any past issues with schedule adherence, budget management, or quality control.

How effective is the firm-fixed-price contract type in managing costs for this project?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs in construction projects where the scope of work is well-defined. It shifts the risk of cost overruns to the contractor, providing the government with a predictable ceiling on expenditures. For this project, the FFP structure aims to ensure that the base cost of constructing the child development center remains stable. However, the exercise of optional line items introduces a variable element. While these options are also likely FFP, their necessity and pricing must be rigorously evaluated to ensure they do not undermine the cost-control benefits of the overall contract structure.

What are the historical spending patterns for similar child development center construction projects by the Department of Defense?

Historical spending patterns for similar child development center (CDC) construction projects by the Department of Defense (DoD) can vary significantly based on location, size, specific requirements (e.g., security, LEED certification), and market conditions at the time of award. Generally, DoD construction projects are substantial investments. A review of past DoD CDC projects would likely show a wide range of contract values, with larger facilities or those in high-cost-of-living areas commanding higher prices. Analyzing the cost per square foot or cost per child capacity for comparable projects would provide a benchmark to assess whether the $17.6M award for the Fort Myer CDC is aligned with historical spending trends and represents reasonable value.

What is the significance of the $1.16M in optional line items on the total contract value?

The $1.16M in optional line items represents approximately 7% of the base bid ($16.44M), bringing the total contract value to $17.6M. While options are common in federal contracts to allow for flexibility and potential expansion of scope, their significance lies in their potential to increase the overall cost and duration. It is crucial to understand why these options were included and exercised. Were they essential additions identified during the design phase, or were they potential scope changes that were added to provide flexibility? The cost-effectiveness and necessity of these optional items are key factors in evaluating the overall value and budget adherence of the contract.

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912DR06R0051

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15020 SHADY GROVE RD STE 500, ROCKVILLE, MD, 08

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,600,064

Exercised Options: $17,600,064

Current Obligation: $17,600,064

Contract Characteristics

Cost or Pricing Data: NO

Timeline